Stocks

In this survey we will measure the investor's experience as much as possible. Therefore, in the formation of a portfolio, we assume that investors track portfolio insider trading information in reports and form a portfolio by including all stocks traded by insiders in the same month at the end of each month. Later, he gave each share of his portfolio the same weight. After the insider trading, he kept each stock in his portfolio for X issues. In addition, he rebalances the portfolio monthly, abandons all shares that completed the portfolio for X months, and adds all the shares just executed.

There are two types of markets: common stock and preferred stock. Common stock is a popular form of stock, most stock trading is done with this type. Common stock gives investors the ownership of the company and provides part of the company's interests. Most people like to purchase common stocks because they participate in the election of the directors and get a higher return, but this can never be solved. In the event of bankruptcy, ordinary shareholders become the last shareholder before the company pays creditors, employees and bond holders. Preferred stock also gives shareowners certain ownership but does not give voting rights. Investors who purchase preferred stocks have the right to permanently receive fixed dividends; this is not the case for ordinary shares whose dividends are constantly changing.

Economists are not good at naming, so the most common stock is called "common stock". When people talk about stocks, they are almost surely talking about common shares. This is a small part of the ownership of the owner and gives the owner the right to receive dividends (a small part of the company's interests) and the right to give one vote when electing a director. Other stocks are called preferred shares. Like ordinary shares, preferred shares represent ownership of the company, but usually do not give the owner the same voting rights. One advantage of preferred stocks is that they have the right to obtain initial rights to dividends and cash if the company is acquired or liquidated. Because preferred stocks provide additional benefits, they are usually sold at a higher price than ordinary shares.